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Important reminder regarding your Terms and Conditions of Trade

Introduction

This is an important update for all of AMPAC’s clients who trade with ‘consumers and small businesses’ as defined by the Australian Consumer Law (ACL).

While the definition of ‘consumer’ is logical (personal, domestic or household use), the definition of a ‘small business’ has expanded to include businesses employing fewer than 100 persons or having a turnover of less than $10M a year – not so small.

Terms and Conditions of Trade
If you have customers who fall into that category, there are a number of important things we wanted to remind you of:
  • If the goods you are selling to a consumer or small businesses are for less than $100,000 or are for more than $100,000 but are used for personal, domestic or household use, then your customer may automatically receive the consumer protections under the ACL.
  • There is mandatory wording around what warranties you must give your customers. These new words must be included in your Terms and Conditions. They refer to consumer rights that cannot be excluded by your Terms and Conditions.
  • Prior to November 2023, where an entity attempted to rely on a clause that was deemed unfair under the ACL by the Court, the Court could simply strike out the clause and read the contract without it. However, from November 2023 onwards, the changes to the ACL have made it an offence to have or rely on unfair terms in the contract and serious penalties apply for doing so or attempting to do so.
  • List ItemAs at April 2025, the maximum penalty for a breach of a civil penalty provision under the ACL is $2,500,000 for an individual. The maximum penalty for a breach by a corporation is the greater of $50 million, three times the benefit of the unfair contract term (if that value can be determined) or 30% of adjusted turnover during the breach turnover period (i.e. over the period of the breach, within a minimum of 12 months).
The above makes the ACL clauses crucially important to include and for those clauses to be drafted correctly. We urge you to review your Terms and Conditions at your earliest opportunity.

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Please do not hesitate to get in contact with us if you would like further assistance regarding your Terms and Conditions.

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